BELGIUM Law and Practice Contributed by: Steven De Schrijver and Carl Dotremont, Allegiance Law
with the target company in a certain sector, including through the effective participation in the management or control of the company (eg, through ownership of shares or by acquiring voting rights), is envisaged by the FDI screening mechanism. Although this definition seems very broad, the only foreign investments that will fall within the scope of the FDI screening mecha- nism are foreign investments that are by foreign inves- tors seeking to gain control of − or, depending on the sector of the target company, acquire 10% or 25% of the voting rights in − a Belgium company, in which the foreign investment will either: • affect security and public order (ie, the target company operates in certain sensitive industries in Belgium); or • affect the strategic interests of Belgian communi- ties and regions. The FDI screening mechanism has several phases, as follows. • Notification phase – the parties involved in the investment must submit transaction documents to the Interfederal Screening Commission (ISC) sec- retariat for review. If information is missing, the ISC will notify the parties. The notification must include certain required information on the investment. • Assessment phase – the ISC members will review the file on a preliminary basis and determine whether there is a risk to public order, security, or strategic interests. If no risks are identified, the parties can proceed with the closing of the trans- action. If no answer is provided by the ISC to the notifying parties within 30 days following their notification of a complete file, the investment is deemed to have been approved and a screening phase can no longer take place. • Screening phase – if any risks to public order, security or strategic interests are identified, the ISC members will further analyse the transaction and draft advice to each government involved. It should at least include a specific risk analysis. The dura- tion of this phase varies based on the complexity of the transaction and the number of governments involved. If a competent ISC member deems an FDI to have potential implications, they notify will other ISC members and prepare a draft opinion
shared with the foreign investor and the target company. The parties involved can provide com- ments within 30 days, followed by a hearing within ten days. Each ISC member drafts a final opinion (positive or negative), potentially including mitigating measures. Negotiations occur, leading to a binding agreement. Competent ministers and college members make preliminary decisions based on ISC opinions. These decisions are conveyed to the ISC Secretariat, which combines them into a final decision: approval, approv- al with mitigating measures, or refusal if the impact is non-remediable and at least one competent author- ity provides negative advice. Certain actions suspend time periods, and complex investments can extend the ISC advisory period to two months. 7.4 National Security Review/Export Control Besides the screening of foreign investments listed in 7.3 Restrictions on Foreign Investments , Belgium enforces EU regulations on export controls, appli- cable at both federal and regional levels (including the Flemish, Walloon and Brussels-Capital Regions). The country is part of international regimes such as the Wassenaar Arrangement, the Nuclear Suppliers Group, the Australia Group, the Missile Technology Control Regime, and the Zangger Committee. Dual-use goods, military items and cultural goods are subject to export controls. The regulatory framework involves various laws, such as the EU Dual-Use Regu- lation, and regional decrees. The application process for export licences varies by region and denial deci- sions can be appealed administratively. Violations incur civil or criminal penalties, including fines, impris- onment and licence revocation. Mitigation is possible under certain conditions. Belgium lacks a specific procedure for voluntary self- disclosure but considers it when determining pen- alties. Specific restrictions on exports to countries such as China, Israel, Turkey, Pakistan, Saudi Arabia and the UAE are maintained – each subject to par- ticular conditions and considerations. Authorities do not publish public lists of denied entities, but some regions have specific policies regarding certain export restrictions.
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